On 7/20/2021, the FDIC announced a proposed rule to simplify aspects of the agency’s deposit insurance coverage rules. In the FDIC’s release, it was explained that this proposal would do a number of things including:

Simplify deposit insurance coverage for deposits held in connection with revocable and irrevocable trusts by merging these two deposit insurance categories and applying a simpler, common calculation to determine coverage for all trust accounts.
Amend the rule that governs coverage for mortgage servicing accounts to allow principal and interest funds advanced by a mortgage servicer to be included in the deposit insurance calculation.

In the release, the FDIC explained that they receive more inquiries related to deposit insurance coverage for trust deposits than all other types of deposits combined. The proposal would make the trust rules consistent and easier to understand for bankers and depositors, and also would facilitate prompt payment of deposit insurance by the FDIC in the event of an insured depository institution’s failure.

Comments on the proposed rule are due 60 days after publication in the Federal Register.

The Notice of Proposed Rulemaking can be found here.

A Fact Sheet can be found here.

A statement from FDIC Chairman Jelena McWilliams can be found here.

Adam Witmer

Adam Witmer is a speaker, author, and founder of the Compliance Cohort. Adam has taught hundreds of seminars and training sessions to thousands of bankers throughout the United States and teaches on all areas of regulatory compliance. Adam has written five e-books that he never published, hit a grizzly bear while driving in a National Park, and is an award winning photographer and musician (though he no longer takes photos nor plays any instruments). In his spare time, Adam can be found kayaking on the lake, doing taekwondo with his kids, working on his (project) house, or spending time with his family.

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